MCD, DMRC in face-off over property tax
THE MCD and DMRC are both standing their ground on the issue of property tax, and the spoils of the battle will be more than Rs 2.64 crore.
The Corporation says DMRC is liable to pay tax as it uses municipal resources, and currently, ex-partie assement amounts to Rs 2.64 crore.
But according to a senior DMRC official, the Rail Corporation’s contention is that it is not liable to pay any property tax, adding that under Section 184 of the Railways Act, there is no need to pay property tax to any local body.
MCD officials say the Assessment and Collection had passed an order on March 30, saying the DMRC is eligible to pay property tax to MCD for all its buildings and stations. The order asks DMRC to pay property tax amounting to Rs 2,645,588,00. This includes arrears from 1999 onwards. The DMRC official says they will challenge the order in the high court.
Problem started with MCD’s first demand notice to the Rail Corporation in 1999, asking for Rs 66,83,300 as property tax. After this, the Corporation sent another demand note in 2000. The DMRC then filed a case in the high court, saying it was not liable to pay property tax to the MCD as it is a part of the Indian Railways.
On February 26, 2003, the HC said MCD consider DMRC’s contention on merit on whether it was liable to pay property tax or not.
After this, say MCD officials, DMRC’s case was heard by the Assessor and Collecter of MCD, Sangeeta Kampani.
According to the order, MCD has stated that DMRC is not a part of the Indian Railways, but an independant corporation with the Centre and the Delhi Government as shareholders. It says the DMRC is a corporate body and not sovereign railways. The order equates the DMRC with organisations like Scheduled Banks, Airport Authority of India, LIC and similar government corporations. According to MCD officials, all these bodies pay property tax.
More: cities.expressindia.com